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Employers’ Choice on How Income Tax Hits the Mid‑Year Bonus Changes Workers’ Take‑Home Pay

Deferring the tax reconciliation until the annual settlement typically preserves more cash for workers in an inflationary context.

Overview

  • Current rules let employers pick between two legal methods for withholding Income Tax on the Sueldo Anual Complementario (SAC) under RG 4003‑E and related payroll rules.
  • Method A adjusts tax at the moment the aguinaldo is paid by adding the actual SAC and subtracting prior doceavas, which can raise immediate retentions.
  • Method B keeps the month‑by‑month doceava proration and postpones the full adjustment to the annual or final liquidation, which often results in less tax withheld at payment time.
  • Because ANSES applied a 2.58% mobility rise for June and published a July calendar confirming a 2.1% increase that starts the week of July 8, many advisers say inflation‑updated scales used at annual settlement make option B more favorable now.
  • Workers cannot force a method and employers are not required to notify staff, so employees should check payslips and expect any excess tax taken under Method A to be returned at the annual liquidation or on termination.